Is India's Economic Growth Left the Poor Behind?

There have been dramatically differing assessments of the extent to which India’s poor have shared in the robust growth that has followed liberalizing policy reforms since the early 1990s. Some estimates suggest large gains to the poor, while others suggest little or no progress in poverty reduction. We provide our own estimates and review the data issues that have fuelled this debate. We argue that poverty has been falling in India during the 1990s, though at a lower rate than one would have expected given India’s aggregate growth rate. Our analysis indicates that the geographic and sectoral pattern of India’s growth process has greatly attenuated its aggregate impact on poverty. The observed covariates of the growth elasticities of poverty across states point to actions India needs to take (on top of growth-promoting reforms) to assure more rapid poverty reduction in the future.